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5 Beaten-Down Medical Product Stocks to Rebound in 2019

In terms of market size, the U.S. health care market is the largest in the world. America’s unparalleled purchasing power, massive demand for medical services, equipment, cosmetic surgeries and opportunity for innovation have lent it a competitive edge. However, macroeconomic issues, volatility in oil prices, trade war with China, geopolitical conflict with North Korea and Iran, three interest hikes by Fed and a soft global economy have been denting the economy as a whole, just at the threshold of 2019.

The Zacks Medical Product industry, which was once acclaimed for its high-paying jobs, and research and development opportunities, is also no exception here. The industry lost 1.8% on a year-to-date basis.

Thus, it is essential for the investors who are willing to park their money in the healthcare sector, to find the means that can dilute these woes. But before understanding how to make prudent investments for the year, let’s take a look at the various developments that have taken place within the space.

Not-So-Happy New Year for Medical Product?

Trade-War Fiasco

The medical product space is confronted by short-term hurdles associated with the U.S.-China trade war. According to a survey conducted by the Medical Imaging & Technology Alliance (MITA), the tariffs will cost medical product companies nearly $138 million every year.

Cyber Security Risks

A recent survey report by KPMG revealed that around 81% of health care organizations experienced data breach over a two-year period beginning 2015-end (per an article published on 24x7).

For instance, in April, the FDA had to issue a Safety Communication to inform the patients about the availability of an additional firmware update to combat the confirmed cybersecurity risks discovered in Abbott Laboratories’ ABT          implantable cardiac product along with managing rapid battery depletion.

Regulatory Hurdles

The Unique Device Identification (UDI) system by the FDA has been quite costly and difficult to implement for medical product manufacturers.Adding to the woes, the medical-device tax repeal amendment is just a temporary relief for manufacturers. The tax will be back in effect on Jan 1, 2020.

Screening Stocks

Buoyed by these trends, there are a few medical product companies that had a rather weak 2018. However, with a Zacks Rank #1 (Strong Buy) or 2 (Buy), these stocks hold immense promise for long-term growth.You can see the complete list of today’s Zacks #1 Rank stocks here.

5 Possible Outperformers of 2019

Chimerix, Inc. CMRX

This Zacks Rank #2 company lost 35.2% on a year-to-date basis.

The company has been progressing well with its oral and IV brinci platform, the small pox program. Further, Chimerix’s newest molecule – CMX521 – for norovirus has been providing it with a competitive edge in the niche space.

Per management, Chimerix’s substantial work over the past three years has set the stage for 2019 to be a transformational year for the company.

MacroGenics, Inc. MGNX

This Zacks Rank #2 company lost 35.2% on a year-to-date basis.

However, MacroGenics has achieved major milestones with Margetuximab in the SOPHIA breast cancer trial. The company’ssolid progress in the Phase 1b/2 gastric cancer study is encouraging.

Management also announced clinical advancement of MGA012 platform for its potential in treating solid tumor cancers. Additionally, the company has two bispecific DART molecule programs in progress.

We expect share prices of MacroGenics to soar in 2019 based on its exclusive products and solutions.

Rockwell Medical, Inc. RMTI

This Zacks Rank #2 company lost 50.9% on a year-to-date basis.

The company is gaining prominence in the global renal space,particularly in North America, Latin America and Asia-Pacific. Rockwell Medical is also expected to gain from itsTriferic platform, the only FDA-approved drug indicated to replace iron and maintain hemoglobin in hemodialysis patients suffering from anemia.

The company also plans to launch its dialysates Triferic formulation inthe United States, in the first half of 2019.

TG Therapeutics, Inc. TGTX

This Zacks Rank #2 company lost 45.7% on a year-to-date basis.

Headquartered in New York, TG Therapeutics is a biopharmaceutical company that focuses on commercialization of novel treatments for B-cell malignancies and autoimmune diseases in the United States.

Management at TG Therapeutics has formulated an early-stage pipeline to power the next-generation proprietary triple and quad combinations. This unique pipeline will harness the immune system with PD-L1 inhibitor, and the anti-CD47 and anti-CD19 bispecific antibodies.

Valeritas Holdings, Inc. VLRX

This Zacks Rank #2 company lost 87% on a year-to-date basis.

Valeritasis trying to expand its direct-to-patient marketing efforts. The company is a commercial-stage medical technology company, focusing on the development and commercialization of technologies to treat patients with Type 2 diabetes in the United States and China.

The company’s clinical team continues to produce meaningful clinical and pharma-economic data, demonstrating the benefits of its flagship V-Go platform over conventional insulin injection therapy.

In addition to the stocks discussed above, would you like to know about our 10 top tickers to buy and hold for the entirety of 2019?

These 10 are painstakingly handpicked from over 4,000 companies covered by the Zacks Rank. They are our primary picks poised to outperform in the year ahead. Be among the first to see the new Zacks Top 10 Stocks >>


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